five years of taxes to do?

February 7, 2016 11:31 PM

I am one of the thousands of Americans who live overseas and because of ludicrously low incomes have never gotten it together to file taxes in the USA. Zero of my USA friends here are filing taxes in America. I suddenly co-own a business but their accountant does not do expat taxes. How to go about this smoothly would be a delight. I am currently being quoted £500 for each tax year preparation.
posted by anonymous to Work & Money (16 answers total)

I can recommend: http://www.ustax.bz/
posted by alchemist at 11:48 PM on February 7, 2016

Check www.globaltaxhelp.com (owned by friend.)
posted by lois1950 at 12:07 AM on February 8, 2016

The years before you owned the business may be simple enough to do on your own (or with tax prep software).

Then it might be more reasonable to pay for just the recent year(s) with the business.
posted by nat at 12:14 AM on February 8, 2016 [1 favorite]

I just filed 13 years. A little over two grand with H&R Block.
posted by Joseph Gurl at 1:59 AM on February 8, 2016

If you live abroad and have a ‘ludicrously low income,’ you almost certainly don’t owe the IRS any money and it is extremely easy to catch up. I am not sure how comfortable you are doing tax returns on your own, but I would propose thinking about dividing your strategy into focusing on the years in which you didn’t own the business and had a low income and the years in which you own the business.

For the years when you had a low income, it is very easy…. Either find a tax preparer or even another American in a similar situation. Have them do just one return with/for you and use this completed return to do the others. Then you just need help for one year. My understanding is that the IRS fine for late returns is dependent on the amount of money you owe. Therefore, with a low income, you won’t owe money on these.

I would do the same for the future now that you are a business owner. Pay a preparer do your return for one year and then copy the return for future years.

Make sure whoever helps you has experience with Americans living abroad as there are special things to consider.
posted by jazh at 2:43 AM on February 8, 2016 [1 favorite]

> I can recommend: http://www.ustax.bz/
> posted by alchemist at 2:48 on February 8

Small dang world. I know this guy and can also recommend. He's the real deal.
posted by cvp at 5:12 AM on February 8, 2016 [2 favorites]

If your income was "ludicrously low," did you even have a filing requirement? You might be owed something, but if it's going to cost you a lot to file it may not be worth it.
posted by chaiminda at 5:21 AM on February 8, 2016 [1 favorite]

You still need to file even if you have a low income.
posted by triggerfinger at 6:35 AM on February 8, 2016 [1 favorite]

I agree with what others have said, that 500£ a year going forward seems reasonable. However, it does not seem reasonable to update the paperwork for the past years where you had very low income.

Paying several thousand pounds for "catching up" is not reasonable. Your accountant should be able to do that -- if necessary -- as part of the current year's return. For a one-time additional fee, perhaps, but if you owe nothing it should not be this high.
posted by cotterpin at 7:10 AM on February 8, 2016

FYI, owning a foreign business carries additional filing requirements with heavy penalties if you don't do it right.
posted by Nothing at 11:23 AM on February 8, 2016

Here's info on filing requirements for this year. I agree that with a business you have to file, but you may not for previous years.
posted by chaiminda at 11:52 AM on February 8, 2016

Some points to clarify...

1. If you are a US citizen, you must file a tax return regardless of your income.
2. If your income was low, you won't owe any money nor will you have to pay fines, but you do have to file.
3. You only need a preparer to do one return. You can do the rest very easily just knowing a few things (i.e. your income and the exchange rate). This is super easy and you can do it quickly in one evening.
4. I believe, if you haven't filed in a while, the IRS expects you to file the last five years.

Get these done and focus on the future, where, as a business owner, you may owe taxes.
posted by jazh at 12:48 PM on February 8, 2016 [1 favorite]

1. If you are a US citizen, you must file a tax return regardless of your income.

This is not true. For instance, single US Citizens under age 65 are not required to file if they make less than $10,300 in income. However, they may want to file even if they don't have to file for a variety of reasons.

See page 4-6 of this IRS publication (pdf).
posted by Jahaza at 1:20 PM on February 8, 2016

Go back and file yourself for under the threshold for filing for every year up to last year. Get professional help to do your last year of taxes if you are over the threshold. If you are a US citizen and your bank knows this, they are now required to report your account to the IRS as of last year, so you need to square that one and keep it going square going forward.
posted by DarlingBri at 4:23 PM on February 8, 2016 [1 favorite]

I didn't file when I was living overseas for similar reasons. When I returned to the US, I filed (with an accountant) and discovered that I was owed thousands of dollars, so it's worth filing. Your situation may well change now that you're a business owner, but for the previous low-income years, you should find a way to file.
posted by yellowcandy at 11:06 PM on February 8, 2016

Thank you Jahaza. I didn't know that it is not necessary to file a tax return if your income is under 10,300$.
posted by jazh at 1:46 AM on February 9, 2016